The luxury travel industry is undergoing a significant transformation this year, driven by shifts in traveler demographics, preferences, and spending habits. According to McKinsey & Company’s 2024 “State of Tourism and Hospitality” report, today’s luxury travelers are younger, more diverse, and driven by a desire for unique, immersive experiences.
Who Is the New Luxury Traveler?
McKinsey’s report states that 35% of the luxury travel market now consists of "aspiring luxury travelers with net worths between $100,000 and $1 million.” They’re not the uber-wealthy, but they’re willing to spend money on memorable trips and experiences.
Millennial and Gen Z travelers are leading this charge. Their focus is not on opulence, but rather authentic and local experiences, immersive culture and adventure, as well as travel experiences centered around sustainability.
This shift is also becoming more focused on trip personalization. Where luxury travel before might have only focused on high-end accommodation, travelers now are looking for unique, experience-driven trips that cater to their personal tastes and values.
Are the New Luxury Travelers Coming to Houston?
In 2024, luxury and upper-upscale-class hotels in Houston saw a steady increase in demand compared to the previous year, with exceptional growth in key performance indicators in Q3.
Luxury travel to Houston skyrocketed in July 2024, showing double-digit growth rates for luxury class hotel chain KPIs. In July, luxury class properties saw a 23.4% YOY growth in demand and a 29.2% growth in revenue. Upper-upscale class hotels also excelled in July 2024, experiencing even higher occupancy rates of 70.7%, a 13.7% gain, and demand increases of 14% YOY.
The Houston market is evolving to meet this higher demand, with luxury-oriented hotel openings like the Thompson Hotel that debuted earlier this year and the 71-room Saint Augustine opening before the end of the year. The Birdsall, part of the Auberge Resorts Collection, is set to open in 2027 with 105 rooms while another luxury property is in the plans for the 60,000-square-foot entertainment complex breaking ground in 2026 adjacent to Minute Maid Park.
Written by Megan Henson
Pictured: Post Oak Hotel, Uptown
